FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v Tyco Australia Pty Ltd ACN 008 399 004 [2000] FCA 1445 TRADE PRACTICES - penalty and injunctive relief imposed for breach of s 45 Trade Practices Act 1974 (Cth) where breach acknowledged by respondents and joint submissions lodged Trade Practices Act 1974 (Cth), s 45 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 AND ORS Q 239 OF 1999 DRUMMOND J 5 OCTOBER 2000 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 239 OF 1999 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 First Respondent GRINNELL ASIA PACIFIC PTY LIMITED T/as O'Donnell Griffin ACN 003 905 093 Second Respondent FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541 Third Respondent PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999 Fourth Respondent INDEPENDENT FIRE SPRINKLERS PTY LTD ACN 009 976 854 Fifth Respondent INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720 Sixth Respondent ALLFIRE SYSTEMS PTY LTD ACN 010 713 149 Seventh Respondent THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786 Eighth Respondent ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770 Ninth Respondent ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212 Tenth Respondent ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD ACN 069 159 744 Eleventh Respondent FIREVAC PTY LTD ACN 010 607 379 Twelfth Respondent IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452 Thirteenth Respondent PREMIER FIRE PROTECTION (QLD) PTY LTD ACN 050 410 636 Fourteenth Respondent TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811 Fifteenth Respondent SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368 Sixteenth Respondent F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd) ACN 009 659 410 Seventeenth Respondent BURMESS PTY LTD T/as BEI Services ACN 010 623 677 Eighteenth Respondent RICHARD McCORMACK Nineteenth Respondent KENNETH EDWIN WALLER Twentieth Respondent KEVIN FISHER Twenty-First Respondent MATTHEW SPROULE Twenty-Second Respondent TERENCE MICHAEL McDONALD Twenty-Third Respondent RAYMOND EDWARD KING Twenty-Fourth Respondent MICHAEL JOHN LEWIS Twenty-Fifth Respondent DAVID JAMES CROSBY Twenty-Sixth Respondent TREVOR PATRICK Twenty-Seventh Respondent DEREK COOPER Twenty-Eighth Respondent ALEXANDER ROBERT THOMSON Twenty-Ninth Respondent GORDON EDMUND DAY Thirtieth Respondent ALLAN GEOFFREY MURRELL Thirty-First Respondent KERRY JOHN MOULDS Thirty-Second Respondent KEVYN RAYMOND ALLEN Thirty-Third Respondent JOHN EDMUND BARNEY Thirty-Fourth Respondent BRIAN GEOFFREY DAVIES Thirty-Fifth Respondent DAVID WELLMAND DOUYERE Thirty-Sixth Respondent DAVID WILLIAM KEMP Thirty-Seventh Respondent LESLIE JOHN BAILEY Thirty-Eighth Respondent EDWARD PETER GOLEMBA Thirty-Ninth Respondent MICHAEL WILD Fortieth Respondent STEVEN WALTER SPURR Forty-First Respondent CLINT LAWRENCE PRICKETT Forty-Second Respondent IAN JAMES TAYLOR Forty-Third Respondent WILLIAM JOHN LYNCH Forty-Fourth Respondent BRIAN GRAHAM STARKEY Forty-Fifth Respondent KENNETH BRIAN THOMSON Forty-Sixth Respondent EON WILLIAM RADLEY Forty-Seventh Respondent GREGORY JOHN BOURKE Forty-Eighth Respondent JOHN FRANKLIN PREECE Forty-Ninth Respondent ROY ERNEST TESCH Fiftieth Respondent DENNIS BRETT Fifty-First Respondent NIGEL STEPHEN REHBOCK Fifty-Second Respondent KENNETH NORMAN ROSE Fifty-Third Respondent NOEL ANTHONY MEYER Fifty-Fourth Respondent WILLIAM FRANCIS SHEEHAN Fifty-Fifth Respondent ALAN JOHN BLUNDELL Fifty-Sixth Respondent CHUBB AUSTRALIA LIMITED Fifty-Seventh Respondent CHUBB AUSTRALIA LIMITED First Cross-Claimant DIETOOL (WA) PTY LIMITED First Cross-Respondent JAMES HARDIE INDUSTRIES LIMITED Second Cross-Respondent JUDGE: DRUMMOND J DATE OF ORDER: 5 OCTOBER 2000 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. In respect of its contraventions of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) and of its ancillary involvement in contraventions of those sections alleged in paragraph 133 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $235,000 be imposed upon the twelfth respondent. 2. In respect of his ancillary involvement in the contraventions by the twelfth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 165 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the forty-fourth respondent. 3. The penalty of the twelfth respondent is to be paid to the Commonwealth of Australia as follows: (a) the sum of $15,000 within seven days of the date of this order; (b) the further sum of $45,000 on or before 1 May 2001; (c) the further sum of $55,000 on or before 1 May 2002; (d) the further sum of $60,000 on or before 1 May 2003; (e) the further sum of $60,000 on or before 1 May 2004; (f) if any instalment is not paid on or before the due date then the entire balance of the penalty of $235,000 then unpaid becomes immediately due and payable. 4. The penalty of the forty-fourth respondent is to be paid to the Commonwealth of Australia as follows: (a) the sum of $12,500 on or before 1 December 2000; (b) the further sum of $12,500 on or before 1 December 2001; (c) the further sum of $12,500 on or before 1 December 2002; (d) the further sum of $12,500 on or before 1 December 2003; (e) if any instalment is not paid on or before the due date then the entire balance of the penalty of $50,000 then unpaid becomes immediately due and payable. THE COURT ORDERS BY CONSENT OF THE APPLICANT AND THE TWELFTH AND FORTY-FOURTH RESPONDENTS THAT: 5. The twelfth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents, or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that: (a) has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the twelfth respondent is a party, that: (i) the twelfth respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or (ii) the twelfth respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or (iii) another provider of fire sprinkler system installation services will allow the twelfth respondent to win any tender let by a third person for the provision of such services; or (b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons. 6. The twelfth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that: (a) has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the twelfth respondent is a party, that: (i) the twelfth respondent will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or (ii) the twelfth respondent will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or (iii) another provider of fire alarm system installation services will allow the twelfth respondent to win any tender let by a third person for the provision of such services; or (b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons. 7. The forty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from: (i) being directly or indirectly knowingly concerned in or party to; (ii) inducing or attempting to induce; or (iii) aiding, abetting, counselling or procuring; the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that: (a) has the purpose or effect or likely effect that: (i) that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or (ii) that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or (iii) another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or (b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons. 8. The forty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from: (i) being directly or indirectly knowingly concerned in or party to; (ii) inducing or attempting to induce; or (iii) aiding, abetting, counselling or procuring; the making of, or arriving at, or giving effect to, by a corporation providing fire alarm system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that: (a) has the purpose or effect or likely effect that: (i) that corporation will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or (ii) that corporation will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or (iii) another provider of fire alarm system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or (b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons. 9. The twelfth respondent pay the applicant's costs of and incidental to these proceedings in the agreed amount of $14,000within seven days of the date of this Order. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 239 OF 1999 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: TYCO AUSTRALIA PTY LTD (Formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 First Respondent GRINNELL ASIA PACIFIC PTY LIMITED T/as O'Donnell Griffin ACN 003 905 093 Second Respondent FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541 Third Respondent PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999 Fourth Respondent INDEPENDENT FIRE SPRINKLERS PTY LTD ACN 009 976 854 Fifth Respondent INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720 Sixth Respondent ALLFIRE SYSTEMS PTY LTD ACN 010 713 149 Seventh Respondent THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786 Eighth Respondent ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770 Ninth Respondent ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212 Tenth Respondent ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD ACN 069 159 744 Eleventh Respondent FIREVAC PTY LTD ACN 010 607 379 Twelfth Respondent IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452 Thirteenth Respondent PREMIER FIRE PROTECTION (QLD) PTY LTD ACN 050 410 636 Fourteenth Respondent TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811 Fifteenth Respondent SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368 Sixteenth Respondent F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd) ACN 009 659 410 Seventeenth Respondent BURMESS PTY LTD T/as BEI Services ACN 010 623 677 Eighteenth Respondent RICHARD McCORMACK Nineteenth Respondent KENNETH EDWIN WALLER Twentieth Respondent KEVIN FISHER Twenty-First Respondent MATTHEW SPROULE Twenty-Second Respondent TERENCE MICHAEL McDONALD Twenty-Third Respondent RAYMOND EDWARD KING Twenty-Fourth Respondent MICHAEL JOHN LEWIS Twenty-Fifth Respondent DAVID JAMES CROSBY Twenty-Sixth Respondent TREVOR PATRICK Twenty-Seventh Respondent DEREK COOPER Twenty-Eighth Respondent ALEXANDER ROBERT THOMSON Twenty-Ninth Respondent GORDON EDMUND DAY Thirtieth Respondent ALLAN GEOFFREY MURRELL Thirty-First Respondent KERRY JOHN MOULDS Thirty-Second Respondent KEVYN RAYMOND ALLEN Thirty-Third Respondent JOHN EDMUND BARNEY Thirty-Fourth Respondent BRIAN GEOFFREY DAVIES Thirty-Fifth Respondent DAVID WELLMAND DOUYERE Thirty-Sixth Respondent DAVID WILLIAM KEMP Thirty-Seventh Respondent LESLIE JOHN BAILEY Thirty-Eighth Respondent EDWARD PETER GOLEMBA Thirty-Ninth Respondent MICHAEL WILD Fortieth Respondent STEVEN WALTER SPURR Forty-First Respondent CLINT LAWRENCE PRICKETT Forty-Second Respondent IAN JAMES TAYLOR Forty-Third Respondent WILLIAM JOHN LYNCH Forty-Fourth Respondent BRIAN GRAHAM STARKEY Forty-Fifth Respondent KENNETH BRIAN THOMSON Forty-Sixth Respondent EON WILLIAM RADLEY Forty-Seventh Respondent GREGORY JOHN BOURKE Forty-Eighth Respondent JOHN FRANKLIN PREECE Forty-Ninth Respondent ROY ERNEST TESCH Fiftieth Respondent DENNIS BRETT Fifty-First Respondent NIGEL STEPHEN REHBOCK Fifty-Second Respondent KENNETH NORMAN ROSE Fifty-Third Respondent NOEL ANTHONY MEYER Fifty-Fourth Respondent WILLIAM FRANCIS SHEEHAN Fifty-Fifth Respondent ALAN JOHN BLUNDELL Fifty-Sixth Respondent CHUBB AUSTRALIA LIMITED Fifty-Seventh Respondent CHUBB AUSTRALIA LIMITED First Cross-Claimant DIETOOL (WA) PTY LIMITED First Cross-Respondent JAMES HARDIE INDUSTRIES LIMITED Second Cross-Respondent JUDGE: DRUMMOND J DATE: 5 OCTOBER 2000 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The twelfth respondent is an independently owned fire protection installation company. The forty-fourth respondent, the other person with whom I have to deal today, is the Managing Director and principal shareholder of Firevac. The forty-fifth respondent, Mr Starkey, a shareholder and employee of the twelfth respondent has earlier been dealt with and a $20,000 penalty imposed on him in respect of his involvement in the anti-competitive conduct, particularly in the sprinkler market. 2 The twelfth respondent, by the forty-fourth respondent or his delegates, attended meetings of the various organisations involved in the anti-competitive conduct at which price-fixing and market-sharing arrangements were made in the period 1989 to 1995 for about three years. The twelfth respondent was a mid-sized participant in the alarm market, having an approximate 15 per cent share of that market. The twelfth respondent was represented, as I say, either by the forty-fourth respondent or his delegates at very many of these meetings. However, it appears that the forty-fourth respondent took action which resulted in the twelfth respondent not always adhering to the arrangements made at these meetings. Nevertheless, by reason of its participation in the anti-competitive conduct in the alarm market, it won at least four alarm installation projects. 3 A similar position obtains in relation to the twelfth respondent's involvement in the sprinkler market, an involvement that extended over about three years. The twelfth respondent in that particular market was one of the smallest participants with an estimated market share of less than 5 per cent. However, again, it was represented at many of the meetings held in connection with the implementation of the anti-competitive arrangements in question. It was generally represented by the forty-fifth respondent to whom I have already made reference, at the meetings held in relation to the sprinkler market. The twelfth respondent, as a result of its participation in the anti-competitive arrangements, was allocated at least four projects, of which it won at least two. 4 The conduct engaged in by the twelfth and forty-fourth respondents involved serious contraventions over an extended period of time of s 45 of the Trade Practices Act. In their favour, the twelfth and forty-fourth, like the forty-fifth, respondents have co-operated in a significant way with the Australian Competition and Consumer Commission, co-operation which has not only simplified the proceedings as between the Commission and the twelfth, forty-fourth and forty-fifth respondents, but which has been of assistance to the Commission in the proceedings it has brought in respect of the same anti-competitive arrangements against other parties involved. 5 I have considered the range of penalties which the parties have agreed should be imposed subject to the Court's approval, and they are in my opinion within a proper range of penalty having regard to the size of the participating organisation in the form of the twelfth respondent, the nature of the conduct and other relevant aspects touching on culpability. 6 There will therefore be orders by consent in the terms of annexure "C" to the joint submissions. The joint submission will be exhibit 3 in today's proceeding. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond. Associate: Dated: 13 October 2000 Counsel for the Applicant: Mr S Couper QC and Mr KN Wilson Solicitor for the Applicant: Australian Government Solicitor Solicitor for the Twelfth and Forty-Fourth Respondents: Mr R Brideaux Date of Hearing: 5 October 2000 Date of Judgment: 5 October 2000